Think Tank: Retail Scores a ‘C’ for Omnichannel and Mobile

Leadership at traditional retailers is aware of the change that has swept the industry: mobile. They are willing to adapt, but the problem is how. In the 2017 Mobile Retail Report, my team at NewStore found that barely any brands are hitting a home run when it comes to mobile. In fact, the report scores the retail industry a “C” for its ability to deliver omnichannel and capitalize on mobile in a world where people don’t let their smartphone leave their possession and more time is spent in apps than watching TV.

We collected up to 500 data points while looking at the customer journey from an online and offline perspective. From Mobile Experience, Search & Discover, Personalization & Engagement and Path to Purchase & Fulfillment, we found that there has been progress over our inaugural report in 2016, but there is an incredible amount of work left to be done for retailers to truly achieve omnichannel.

Many traditional retailers accept the “why” of transformation in the mobile age, but they struggle mightily with the “how.” What needs to happen so this transformation can take place without bogging down in endless conference room debates over money and power? I’ve found the answer is to stop skipping crucial steps when it comes to mobile transformation. Whether you are a small shop, a cherished department store or famous national chain — leaping to choose and execute new technology leaves out critical changes that must take place before the tech decisions are made and process is rolled out.

There was a multitude of technology uses across the 140 luxury, lifestyle and apparel brands we studied. Yet most of them seemed to struggle with serving mobile-obsessed consumers. The industry scored a collective grade of “C” — a slight improvement over the “C-minus” in 2016.

Unfortunately, the industry has not significantly evolved over the last 12 months. To be successful in this mobile era, retail must not only transform its use of technology but also alter the human aspect of the organization. The first step is transforming the workforce, starting with the chief executive officer. Omnichannel is more than a buzzword. It’s a description of what has happened to retail customers and what must happen inside the retail organization if it is to transform successfully.

While the industry was able to nudge up its overall grade, there are some areas where brands remain stagnant over 2016. For example, only 22 percent of brands offer a shoppable native app. How many brands offered apps in 2016? Twenty-two percent. This is despite the fact that customers are three times more likely to purchase on an app than a through the mobile browser. Brands are leaving the majority of loyal consumers without a proper mobile experience to engage with and purchase from.

Retailers: your silos are killing you. Until you break down those walls, mobile will be a pipe dream. If you treat mobile like a project within e-commerce, it will be blocked from fulfilling its true potential and sales across the company will be at risk. My advice would be to consider building an organization that’s channel agnostic; consider hiring a VP of Digital; and consider unifying P&L rather than allowing retail and digital to operate separately. Tap the full organization to test, learn, and teach mobile technology.

Can the industry adapt and survive? Absolutely. While brands have not been moving as quickly as consumers had hoped, the future is coming and we will soon see brands embracing mobile to make omnichannel a reality.

Here are some of the top performers from this year’s report:

Mobile Experience

Sephora has utilized mobile technology in such a way as to connect the online and offline experience. Customers have instant access to a personal bar code on the Sephora app that ensures in-store purchases can be easily credited to their accounts. They can also book an in-store appointment with just a couple of taps.

Once inside the store, Sephora encourages iPad use by customers and associates, allowing both access to the same product information and beauty suggestions, ultimately increasing upsell opportunities. In terms of engagement, Sephora offers a unique “virtual try-on” tool that allows customers to try different looks from the comfort of their own home.

Search & Discover

Abercrombie & Fitch has nailed the omnichannel inventory dilemma, allowing them to provide full transparency for online and in-store shoppers. For example, a customer can check stock levels of online items at their local store.

They have the reverse covered, too. In-store customers looking for reviews on an item can simply open up their app, scan the item’s bar code and pull up the information. Their store associates are also equipped to check on inventory through a mobile device so customers don’t have to track down an item or a size on their own.

Personalization & Engagement

M.Gemi is able to personalize in-store visits by providing their store associates with access to customer profiles, including past purchases both online and offline. With this data in-hand, associates are empowered to make informed recommendations, increasing upsell opportunities.

This relationship building exercise is supported with easy-to-book in-store appointments from the M.Gemi web site, even with the option of sending a text to set up an in-store “fit consult.”

Path to Purchase & Fulfillment

Loft makes the online purchasing process a breeze with formless payment methods and multiple options within the shopping cart for editing an order or saving it for later.

And when in-store, the experience is just as convenient. If there’s something that the customer wants that is no longer in stock, the store associate can access their tablet to both locate and order the item for the customer, ensuring the sale is saved.

Stephan Schambach is founder and chief executive officer of NewStore.

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